Wind energy to Spain

(Last updated: 16 Dec 2008)

Trends and opportunities

The market

Wind attracted more investment globally last year than any other non-fossil fuel based technology, including large hydro and nuclear power. In 2007, Europe wind capacity additions on their own accounted for 40 per cent of new power capacity.

Europe has a wind energy capacity of 57,000 MW which is 61 per cent of the world’s wind capacity. In 2007, Europe capacity grew by over 8,000 MW making it 43.5 per cent of the world’s market for wind turbines. This growth reflects the strong government subsidies and support for the wind industry. Limited production capacity is still one of the key impediments to faster growth.

The largest wind energy markets in the world are Germany and Spain. Germany is the leading producer of wind turbines and components with 36 per cent of 2007 worldwide production employing 85,000. In Denmark 19.7 per cent of all electricity comes from wind power, the highest share in the world. 

Because of planning delays and limited opportunities for new investment there is a growing interest for offshore wind power in Europe, with a large number of projects in the commissioning and planned construction stages. In 2006, the German federal government required that grid managers supply grid connections to offshore parks, and the first German offshore park began production in 2008. The UK, France, the Netherlands, Sweden and Denmark are also developing major offshore wind parks.

In 2009, the financial crisis will likely reduce some private sector investment in wind energy; however investment from major power companies is unlikely to be affected.

Key wind markets in Europe
Country	Capacity (MW)	Installed in 2007 (MW)
Germany	22,247	1,667
Spain	15,145	3,514
Denmark	3,132	2.5
Italy	2,726	633
France	2,455	718
Australia	817 (2006)	168 (2006)

Research and investment

The European industry strengths include: a highly qualified work force, high technology station capacity, stable regulatory framework and advanced R&D facilities, the industry is concentrated in Germany, Spain and Denmark. There has been a rapid pace of technology development in the sector and a strong demand for technologies that improve efficiency or reduce cost.

European companies have a strong track record of investing in Australia. Acciona and Union Fenosa from Spain currently own wind farms in Victoria and NSW with Union Fenosa investing a further $2 billion in Australian wind energy in 2008. There is also opportunity for investment in European infrastructure, Macquarie Bank and Babcock and Brown have also announced significant investments in Spain, especially in the renewable energy and infrastructure sectors. 

Opportunities

The two current largest markets in Europe are Spain and Germany. In 2007, Europe had 6 of the 10 largest markets for wind energy (based on increases in capacity). France, Sweden, Norway and the Netherlands are all planning sizable investments in wind in the short term. In Germany new studies clearly state that re-powering has the potential to double the amount of wind energy capacity onshore in Germany with significantly fewer turbines and can triple the energy yield. This trend will likely follow in other developed wind markets (particularly Spain and Denmark). 

The largest European wide opportunities are in the supply of component manufacture and spare parts to European turbine manufacturers, planning and environmental assessments, offshore technology and finance.

More specific opportunities include:

• Supplies of gearboxes for wind turbines (represents 25 per cent of turbine cost) and spare parts and forging and casting elements to Spanish manufactures. There are few domestic manufacturers and the gearboxes for larger powered models are imported.
• Vattenfall, one of Europe’s largest energy companies, plans to invest A$8 billion in wind power in the Nordic markets in the coming 10 years.  
• Offshore Wind park Q7, a project of Econcern, is being built some 23km offshore. The 120 MW wind farm will generate about 435 GWh annually.

Related opportunities:

• The investment in wind farms is placing pressure on the European Union (EU) electricity grid which must increase its capacity to distribute the wind energy. To address the network issue, the EU will invest approximately €440 billion into transmission and distribution networks.

(Source: State of Renewable Energies in Europe, 7ed. Report - EurObserv'ER 2007)

Marketing your products and services

Market entry

Western Europe is a complex and competitive environment with many local competitors.  Australian suppliers should consider the following:

• European companies are rather conservative when purchasing product and service and often reluctant to buy from companies with no proven track record or in-country support.
• Many companies plan to establish a direct presence in Europe. This can be important commercially, as it is seen as a sign of commitment to the market. The use of case studies involving internationally recognised organisations helps to increase confidence and demonstrate the relevance of the product.
• Commitment to support and long-term presence in the market must be demonstrated. In many cases this will include establishing a direct presence or strategic alliance in Western Europe.  European companies prefer to have local support rather than online support from other countries. 
• There are several specialist trade shows in Western Europe. This is good way to get an understanding of the market and to benchmark your own products/technologies by exhibiting at a trade show or at least visiting the main fairs. Upcoming trade shows include:
  
  
  • European Wind Energy Conference & Exhibition 2009, 16-19 March 2009, Marseille, France
    Organised by the European Wind Energy Association
    
    
  • Hannover Messe - 20-24 April 2009, Hannover, Germany
    Leading trade fair for wind generation technology, components and services.
    
    
  • Offshore Wind 2009 - 14-16 September 2009, Stockholm Sweden
    Run by EWEA, the 2007 event in Berlin was the largest of its type in the world.
    
    
  • Husum Wind Energy - 7-11 September 2010, Husum, Germany
    The leading bi-annual wind energy trade fair.

A first approach should clearly state the benefits of the technology to the customer in terms of cost reduction, efficiency and/or return on investment. Approaches should be tailored for each company or sector and ideally in the local language.

Distribution channels

Distribution channels in the Europe are highly developed, and the most effective route to the market depends on the product in question.

Tariffs, regulations and customs

The EU has a harmonised trade system. Common Customs Tariff (CCT) is applicable to goods from non-EU countries, including Australia.  Most duties are ad valorem (%), based on the GATT Valuation Code (approximate CIF value).

Before shipping any goods to Europe, you should obtain a written customs duty ruling from the local customs service. These rulings are called Binding Tariff Information (BTI). Getting a BTI is free and will prevent any conflict over customs or excise duty.

EU regulation, including quality assurance and industry standards is quite comprehensive and complex. Industry standards will vary depending on the product/service offered.

Links and industry contacts

Wind power-related resources

EU environment – http://ec.europa.eu/environment/index_en.htm
European Environment Agency – www.eea.europa.eu
European Wind Association – www.ewea.org

Contact details

The Australian Trade Commission (Austrade) is the Australian Government’s trade and investment development agency, operating as a statutory agency within the Foreign Affairs and Trade portfolio.

Austrade assists Australian businesses contribute to national prosperity by succeeding in trade and investment, internationally, and promoting and supporting productive foreign investment into Australia.

Austrade:

• Delivers services that assist Australian businesses initiate, sustain and grow trade and outward investment.
• Promotes Australia as an inward investment destination and, with the States and Territories, supports the inflow of productive foreign direct investment.
• Administers the Export Market Development Grants scheme.
• Undertakes initiatives designed to improve community awareness of, and commitment to, international trade and investment.
• Provides advice to the Australian Government on its trade and investment development activities.
• Delivers consular, passport and other government services in designated overseas locations.

A list of Austrade offices (in alphabetical order of country) is available.

More information

For further information please contact Austrade on 13 28 78 or email info@austrade.gov.au